Finance

From Lawyers To Fyre Festival Influencers To Donald Trump, No Consequences (Yet) For Hawking Total Scams

Should there be no due diligence required at all when you take a check in return for slapping your name on something?

In Forrest Gump, when poor Forrest comes back from being a damn war hero and champion ping-pong diplomat, he still tragically doesn’t have two cents to rub together — he can’t even take Mama out to a real fancy dinner. At first, he’s reluctant to sell out and accept a payment to put his name on the fancy Flex-O-Light Ping-Pong paddle. But Mama wisely advises Forrest to hold the brand-name paddle for a while, see if it grows on him, and eventually he makes the right call and gets enough money through his endorsement to fulfil his promise to Bubba to get a shrimpin’ boat. Not much harm in that, right?

But there is an important distinction here: the branded paddles actually existed, worked just fine for whacking a little hollow ball across a table in your grandma’s basement, and didn’t explode in your hand or infect you with gonorrhea or something. There was no harm in Forrest being a tad disingenuous because hey, there was not actually anything wrong with the product. It just needed some exposure.

But Forrest Gump was released in 1994. And that scene is set in the 1970s. Now it’s the Trump era. The endorsement is, in many circles at least, less of a way to get exposure for a good product and more of a way to scam people out of their money by selling them complete garbage based on their misplaced trust in celebrities and pseudo-celebrities.

There have been many recent examples of this. When lawyer Matthew Whitaker was appointed acting attorney general, there were a lot of reasons to be concerned, among them that he was deeply involved with World Patent Marketing, which was a huge scam. This wasn’t just an example of a lawyer doing his job in defending a somewhat shady client in a lawsuit, we’ve all done that. No, there are videos of Whitaker dating back to 2015 in which he is personally hawking World Patent Marketing products and services (which, remember, were not actually decent products and services, but were garbage, although to be fair, Whitaker claims no knowledge of fraud). While the FTC closed down World Patent Marketing and seized its assets, there were no real legal consequences for Whitaker. I guess he was just the messenger.

For another example, stream the Netflix documentary on Fyre Festival if you haven’t already (or the Hulu one if that’s your thing, whatever). Pay special attention — spoiler alert — to the scene where all the models and Instagram influencers are getting paid to come have a big party in the Bahamas and then post to their social media accounts about Fyre Festival. They had no idea that Fyre Festival was a scam and would turn out to be a total disaster, and I can certainly sympathize with the temptation to take a big check waved in your face when your primary talent is looking good in selfies, but is it really right to agree to help sell something you know absolutely nothing about? I guess we’ll find out, because even though the influencers involved have not yet faced any law enforcement-instigated legal consequences, they have been indirectly named in a civil suit. To her credit, Bella Hadid, one of the models who participated in the Fyre Festival promotions, has at least apologized to her followers. On the other hand, Kendall Jenner, another Fyre Festival promoter who was reportedly paid a quarter of a million dollars for one Instagram post, just deleted the post. Meanwhile, the Fyre Festival scam mastermind Billy McFarland sits in the federal prison outside Otisville, New York.

And then there’s our president. Sigh. I don’t have the space to get into all the scams he’s attached his name to, but the Trump University racket is particularly atrocious, in my opinion. There is something just cosmically fetid about conning people who are actually trying to better themselves with an education, and who might ironically be easier marks for having never had the opportunity to get a real education in the first place.

In all of these cases, legal action was taken against the organization at the heart of the scam. But should the people actually promoting a fraudulent organization get off that easy? Should there be no due diligence required at all when you take a check in return for slapping your name on something?

I don’t necessarily support some kind of harsh punishment against these people at present (except for Trump, he knew exactly what Trump University was), because frankly I don’t think the law is clear. Whether it is legal or not though, being an unwitting cheerleader for fraud sure does not seem like something we should be encouraging as a society. Maybe there needs to be some sort of minimal due diligence requirement for people who promote things for money. Forrest Gump at least held the paddle to see if it grew on him before he went slapping his name on it.


Jonathan Wolf is a litigation associate at a midsize, full-service Minnesota firm. He also teaches as an adjunct writing professor at Mitchell Hamline School of Law, has written for a wide variety of publications, and makes it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at [email protected].